“YOU either resign or I’ll sue the lot of you for mismanagement!” a resident shouted at Metropolitan Square Condominium’s Joint Management Committee (JMC). It was a threat that led half the committee to resign.

Those who resigned felt that the Petaling Jaya City Council, known by its Malay acronym MBPJ, ought to intervene and arbitrate disputes among residents before they start throwing lawsuits at one another.

Arbitrating disputes is one of the jobs I do as an MBPJ councillor, and one of the areas I specialise in is the implementation of a new law, the Building and Common Property (Maintenance and Management) Act 2007. This law empowers high-rise property owners to take over the management of their property.

On paper, the concept looks great because stratified property owners have always complained that their maintenance fees are not properly explained to them. And without proper accounting, leakages do occur in how the money is spent.

The law compels the property developer to convene a meeting to form the Joint Management Body (JMB) that makes all property owners shareholders of this new entity. As shareholders, property owners can then vote on who will represent them in the JMC. (Think of the JMB as a company where all apartment owners are the shareholders and the JMC as the company directors who are elected by these shareholders.)

Despite the good intentions, however, this law is not as easy to implement as property owners would like.

The Acts used in the Commissioner of Buildings arbitration meeting (Pic by KW Mak)Lacking resources

When the law was first introduced, lawyers were already sounding the alarm bell. There were too many grey areas in the terminology used, and incomplete guidelines on how to conduct the numerous processes stipulated under the law.

It is the lack of guidelines that prevents the council from enforcing the act straightaway. The fact that residents love to hurl accusations based on their skewed interpretations of the Act further compounds the problems.

To overcome this hurdle, the council started calling for arbitration meetings between disputing parties, in which I act on behalf of the Commissioner of Buildings to hear cases and prepare a report for the council to act upon. Only through such a process can all the facts be ascertained and a fair decision acceptable to all parties achieved.

By the end of September 2008, the council will also be endorsing a set of guidelines that define all the vague sections in the law. For example, where a passage has two or more possible meanings due to the way it is written, the guidelines will define which reading is recognised by the MBPJ. This will help facilitate arbitration.

Although the council attempts to arbitrate as many cases as it can, there are simply not enough resources, especially when there are more than 93,000 stratified residential units under the MBPJ’s jurisdiction. This figure is not inclusive of stratified commercial properties, which must also go through the same exercise.

A lot of problems get filed with the MBPJ, but with only a small department of two people to handle all the cases and enforce rulings, it can be difficult to resolve cases immediately.

Additionally, the officers are not well versed with the laws required in tackling such issues. Hence, it is no easy task to investigate cases and prepare reports on them as the officers need to consult experts like lawyers and accountants before they can issue a formal reply to a query.

Because of this, the council helps those who help themselves. What this means is that the complainants who have compiled all the paperwork and evidence to submit to the council will find their cases called up for arbitration sooner rather than later.

Neighbourly disputes

(Illustration by Nick Choo)

There are many cases that really do not need the council’s intervention. But due to the lack of training in managing their own properties, disputes between neighbours often occur.

Accusations of misappropriation of funds, cronyism in awarding contracts, and lack of transparency are among the top reasons neighbours become hostile towards one another. A case in point is the incident at the Metropolitan Square Condominium’s JMC meeting.

Whether such accusations are true or not, the only losers in the end are all the condominium owners themselves, as nothing gets accomplished during a dispute. It is when conditions deteriorate that the dispute is brought to the council for arbitration.

Such disputes can be prevented through good corporate governance; for example by having meetings with properly set agendas, properly noting minutes of meetings, and calling for open tenders for whatever services the JMC wishes to engage.

In short, be transparent. If JMC members are uncertain about how to do things, ask for help by posting circulars or calling for a residents meeting where these issues can be discussed.

The law empowers owners to act for themselves. But owners cannot be apathetic, and must learn how to manage their own properties. Expecting the council to step in to manage disputes all the time would defeat the purpose of the Act, and would be impossible considering the council’s limited resources.

Now that there is an Act that enables citizens to act in their own interests, it is up to them to learn the ropes and make the most of the situation.

MBPJ councillor KW Mak is happy that assessment rates in Petaling Jaya for most stratified property owners will be reduced next year by between 14% and 25%, subject to the state government’s approval of the MBPJ’s 2009 Budget.